Updates About Budget

The House Oversight Committee heard testimony on Michigan’s Rx Kids program, which provides direct cash assistance to pregnant women and new mothers in participating eligible Michigan communities.

Under the program, participants receive a one-time prenatal payment of $1,500 and monthly payments of $500 for the first six or more months following the birth of a child. The program receives funding through Temporary Assistance for Needy Families (TANF) dollars, the Healthy Michigan Fund, and private philanthropic contributions.

Throughout her testimony, Rx Kids Director Dr. Mona Hanna outlined the program’s identity verification, residency and pregnancy documentation requirements, fraud detection measures, and birth certificate verification that occur before funds are issued. She also testified that roughly 85% of the program’s funding goes directly to the participants, and the remaining 15% is used for operating and administrative costs. Dr. Hanna cited research that shows the program has led to improvements in prenatal care utilization, reductions in premature births, low-birth-weight births, and neonatal intensive care admissions among participants.

Republican members of the committee raised questions around the sustainability, oversight, and funding of the program as well as the long-term goals and eligibility requirements. Another point of concern House Republicans addressed was the lack of safeguards to ensure funds are strictly used for child and family-related expenses.

Hanna responded that the program is designed as an unrestricted cash assistance model and does not monitor individual purchases, instead placing the trust in the recipient. She also stated that taxpayer funds are not used to provide benefits to undocumented immigrants, but that private philanthropic dollars may be allocated for these families.

Discussions surrounding the program and its funding are expected to continue.

Today, state economic leaders presented updated revenues during the May Consensus Revenue Estimating Conference (CREC). The report showed Michigan’s revenues are slightly stronger than originally predicted. Current fiscal year (FY26) revenues are up $307.3 million compared to January projections, and FY27 revenues are up $173.8 million, mainly due to stronger Income Tax and Use Tax collections. The School Aid Fund (SAF) remains stable, while the General Fund is still lagging but has improved since the January CREC. This improvement can partly be attributed to tax policy changes shifting revenue to the SAF. These updated estimates will guide lawmakers as they negotiate the FY27 budget ahead of the July 1 deadline.

For a more in depth review of the May CREC, you may access the presentations and materials here.

The Michigan Senate Appropriations Subcommittee on DHHS recently released their budget recommendations for the department for Fiscal Year 2026-2027 (FY 27). The proposal came in at $40.4 billion ($7.6 billion GF/GP), a gross increase from last year of $10.5 billion ($206.9 million GF/GP). The Senate came in $500 million under Gov. Whitmer’s proposal.

Notably, the Senate recommendation did not include new taxes proposed by the Governor on digital advertising, tobacco, vapes, and other nicotine products, or the changes to online gambling taxes, that would generate an estimated $800 million to assist in covering Medicaid costs. While the Senate did not include any identified Medicaid cost savings in its budget, Gov. Whitmer’s proposal included $150 million in savings and House Republicans called for $300 million. The Senate also proposed 485 new Full-Time Employees (FTEs) compared to the 589 new positions recommended by the Governor.

A brief overview of the Michigan House Republicans proposal can be found here.